BMW and Jaguar Land Rover (JLR) are the latest manufacturers to land in hot water after the U.S. Senate Finance Committee found they both continued using parts made by a Chinese supplier that has been flagged for forced labor. BMW shipped at least 8,000 Minis containing the part after the company was informed about the banned products, JLR imported the parts, and Volkswagen AG manufactured cars with parts from the banned supplier.
The Uyghur Forced Labor Prevention Act went into effect in June 2023, and bans products from Xinjiang, a region in Western China, from entering the United States unless importers can prove that the products were made without the use of forced labor.
Volkswagen AG was the first OEM to end up in this situation earlier this year when a bunch of its new cars were impounded at the port due to a small component that was manufactured using forced labor. Volkswagen replaced the slave labor produced component at U.S. ports, but BMW and JLR continued to import the part until April 2024 despite being notified in January. According to The New York Times,
In a statement, [Ron Wyden, the chairman of the Senate Finance Committee] said that “automakers are sticking their heads in the sand and then swearing they can’t find any forced labor in their supply chains.”
“Somehow, the Finance Committee’s oversight staff uncovered what multibillion-dollar companies apparently could not: that BMW imported cars, Jaguar Land Rover imported parts and VW AG manufactured cars that all included components made by a supplier banned for using Uyghur forced labor,” he added. “Automakers’ self-policing is clearly not doing the job.”
The part in question is known as a LAN transformer and is part of a system that allows a vehicle’s electronic components to communicate with each other. The automakers did not buy the component directly from Sichuan Jingweida Technology Group, also known as JWD, the Chinese manufacturer that was said to have used forced labor. Rather, it was part of an electronic unit they bought from Lear Corp., a supplier of automotive electrical systems.
Lear claims it bought the parts from another supplier and that it doesn’t have direct ties with JWD. Lear notified all three carmakers about the human rights concerns in January 2024. Volkswagen voluntarily disclosed the development to U.S. customs and replaced the part at U.S. ports. BMW continued to import the part in thousands of Minis even after being notified of the labor concerns, until the committee repeatedly questioned it. JLR claims the North American arm of the company was not made aware of the disclosure from Lear, and continued importing the parts for use as replacement parts for older vehicles until it learned the parts were on the forced labor list.
All three companies have released statements taking a stance against human rights violations, and as of now it appears that the three OEMs have stopped using the components in question. The United States is increasing government enforcement of imports of goods that use components produced using slave labor. Last week, 26 Chinese textile companies were added to the list of goods produced using forced labor. A supply chain expert told the New York Times that roughly a million companies worldwide could be affected by enforcement of the Uyghur Forced Labor Prevention Act.
Regardless of how big of an undertaking it is for these companies to identify components that are produced using forced labor, it’s a decision that could improve the lives of countless workers in China. If OEMs stop buying parts from these unethical companies, it could encourage the companies to change their ways to gain back the business.
